5 Benefits
of investing in Debt Mutual Funds..!
The various benefits of investing in Debt Mutual Funds are
listed below -
1. Your investments
are not affected by share market volatility..
Debt Mutual Funds (MFs) invest in a range of interest bearing
instruments like Treasury Bills, Government Securities, Corporate Bonds,
Money Market Instruments and other debt securities.
2. Add stability to
your investment portfolio..!
As Debt Mutual Funds mainly invest in debt securities,
they are relatively more stable than equity investments.
They can also lend
stability to your equity portfolio by reducing the risk associated with your
complete investment portfolio.
3. Freedom to withdraw
your money when required..!
All open ended mutual funds give you the freedom to
withdraw your money as and when required, although your investments may be
subject to an exit load.
Close ended mutual funds have a defined maturity date.
Such funds are listed and can be traded on the stock exchange.
4. You can aim for
better post tax returns..
Tax Reckoner Financial Year 2015-16
 |
| From http://www.onemint.com |
Earnings from debt instruments can come in two forms:
·
Dividend or / interest payments
·
Capital gains based on the difference
between the purchase price and the sale price of the debt security
Tax on capital
gains: Capital gains tax are broken up
and taxed as follows -
·
Short term capital gains (not
exceeding 36 months) – Marginal Tax Rate
·
Long term capital gains (exceeding 36 months) – Indexed Tax Rate (Except for NRIs / QFIs incase of Unlisted Mutual
Fund units, where indexation benefit will not be available)
5. Indexation Benefit..!
Indexation adjust
the purchase value of your investment to indicate the impact of inflation,
while calculating long term capital gains tax for investments held for over 3 year.
From www.icicipruamc.com
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